COOPERATION BETWEEN THE INVESTMENT FUND COMPANY AND THE DEPOSITARY – DUTIES, LIABILITY, AND PRACTICAL PROBLEMS

Abstract

The institution of the depositary constitutes one of the fundamental mechanisms for protecting participants in investment funds. Traditionally, its role was primarily associated with the safekeeping of fund assets and the maintenance of accurate records. However, the development of the financial market, the growing complexity of investment instruments, and regulatory changes at the European Union level have led to a significant expansion of this function. Today, the depositary performs not only a technical role, but also supervisory and protective functions.
Of key importance for the transformation of the legal status of the depositary were Directive 2011/61/EU (AIFMD), Directive 2014/91/EU (UCITS V), and Commission Delegated Regulation (EU) No 231/2013. These regulations extended the depositary’s duties to include monitoring cash flows, verifying the fund’s compliance with legal provisions and its statute, and determining the rules governing liability for breaches of duty and loss of assets. This shift was subsequently reflected in the Polish Act on Investment Funds and the Management of Alternative Investment Funds. The presentation serving as the starting point for these considerations indicates that the new approach to the depositary’s function includes both an extension of its duties and an increased significance of this institution within the system for protecting fund participants.
The doctrine emphasizes that the depositary has ceased to be merely a passive participant in the valuation of assets and has become an entity co-responsible for the proper functioning of an investment fund. At the same time, the extension of its catalog of duties raises significant interpretative and practical doubts, particularly regarding the limits of liability, conflicts of interest, and the admissibility of entrusting certain activities to sub-custodians.
This article aims to analyze the evolution of the investment fund depositary's function following the implementation of the AIFMD and UCITS V regulations into Polish law, with particular emphasis on new duties, liabilities, and the protection of fund participants’ interests. The study applies the dogmatic-legal method and functional analysis, thereby enabling assessment of both the scope of normative changes and their practical consequences for the investment fund market.